The Luddites on the left whine about fracking. They even have footage of frightening toxins expelled from wells and reams of testimony about their ill effects. They have the allegiance of Gov. Cuomo, ensuring New York will continue its downward financial spiral. What they don’t have is a historical context.
Realists like Dickens and Thackery railed about the horrors of the incipient Industrial Revolution, implying that the overpopulated nation would be better off staying on the farm. It wouldn’t have.
It took a while to rectify the situation, especially since our government was anti-union. Child labor laws weren’t imposed in the U.S. until the 1930s. But the failings of something unique and new were humanely dealt with, eventually. As will be fracking, especially with our aggressive EPA.
As a child of the Fed’s zero interest rate policy, fracking is suffering from the collapse of the junk bonds that paid for it, decline in value of collateral it used to back those junk bonds, and decline in the price of its product. A washout is now occurring, mirroring the dot.com bust. But like the Googles and Facebooks that sprung up afterwards, new entities will emerge. Survivors will dominate, as Yahoo, Microsoft and Cisco have. The unique personality Americans possess will again express itself.
Companies will learn to prosper in a $40 a barrel world and increase production. America will become the world’s swing producer. This means we don’t have to worry about the petrodollar. We won’t need Saudi Arabia to sell its oil in dollars. Ninety percent of the oil Saudi Arabia pumps is from the same five fields it pumped from 50 years ago. More than half the wells I worked in Saudi Arabia were water-injection wells. Saudi Arabia is an over-the-hill prize fighter. We are the young buck. And we still have the sass, Protestant work ethic, and passion for innovation that has defined us from the start.